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[2012] ZACC 28
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Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others (CCT 25/12) [2012] ZACC 28; 2013 (3) BCLR 251 (CC) (29 November 2012)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 25/12
[2012] ZACC 28
In the matter between:
GIANT CONCERTS CC
.....................................................................................
Applicant
and
RINALDO INVESTMENTS (PTY) LTD
...............................................
First
Respondent
MINISTER FOR LOCAL GOVERNMENT,
HOUSING AND TRADITIONAL AFFAIRS FOR
THE PROVINCE OF KWAZULU-NATAL
.......................................
Second
Respondent
eTHEKWINI MUNICIPALITY
.............................................................
Third
Respondent
MINISTER FOR PUBLIC WORKS
.....................................................
Fourth
Respondent
MINISTER FOR DEFENCE
...................................................................
Fifth
Respondent
Heard on : 4 September 2012
Decided on : 29 November 2012
JUDGMENT
CAMERON J (Mogoeng CJ, Moseneke DCJ, Froneman J,
Jafta J, Khampepe J, Nkabinde J, Skweyiya J,
Van
der Westhuizen J, Yacoob J and Zondo J concurring):
The applicant, Giant Concerts CC (Giant), seeks leave to appeal
against a judgment of the Supreme Court of Appeal that found
it did
not have legal standing to challenge the lawfulness of a contract
under which the third respondent, the eThekwini Municipality

(Municipality), sold land to the first respondent, Rinaldo
Investments (Pty) Ltd (Rinaldo).
1
On this basis, the Supreme Court of Appeal reversed a judgment of
the KwaZulu-Natal High Court, Pietermaritzburg (High Court)
in
favour of Giant, setting aside the sale.
2
The background is lucidly set out in the judgment of the Supreme
Court of Appeal.
3
What follows draws on and expands that exposition.
The
land at issue, about 21 hectares in extent, is prime property on the
Durban beachfront. The bulk of it houses the headquarters
of the
Natal Command of the South African National Defence Force
(SANDF), but it also includes adjoining municipal land.
The
Municipality acquired the SANDF portion in 1855, but transferred it
to the central government in 1937 for military purposes.
This was
subject to an express condition: if the land was no longer required
for “defence purposes”, it would “revert
to and
become the absolute property of” the Municipality. By 2003,
the SANDF had decided to relocate the Natal Command
to the port
area. The result was that the property would revert to the
Municipality.
The
Minister for Public Works, through whose department the transfer was
being managed, and the Minister for Defence were cited
as parties to
the litigation, and are the fourth and fifth respondents
respectively in this Court. But no relief was sought against
them,
and they were not represented before us. The second respondent is
the
Minister for Local Government, Housing and Traditional
Affairs for the Province of KwaZulu-Natal (MEC), whose approval of
the
contested transaction is in issue.
4
When
the SANDF decision became known, Mr Anant Singh’s film
production company, Videovision Entertainment (Pty) Ltd
(Videovision),
proposed to the Municipality that it purchase the
site to establish a modern film studio in Durban. Rinaldo is
Videovision’s
property holding arm, and has the same
shareholders and directors. Mr Singh is a Durban-born film maker
with an international
reputation.
The
proposal struck a chord, since the Municipality had earlier
established a film office to promote Durban as an international

destination for film production. This had been included in the
Municipality’s integrated development plan,
5
which recognised the importance of the film
industry for economic development. The Municipality had also entered
into a partnership
with the provincial government of KwaZulu-Natal
to promote precisely this.
The
Municipality considered the proposal internally, and its executive
committee approved it in principle. Protracted negotiations

followed. Eventually the terms of a contract of sale were agreed. In
November 2003, the executive committee resolved to recommend
that
the full council approve the sale to Rinaldo for R15 million. The
statutory foundation was a provision of the Local Authorities

Ordinance
6
(Ordinance) that permits the Municipality to sell
immovable property “by private bargain” if satisfied
that “the
interests of the borough will be better served than
by a sale or lease by public auction or public tender, or that other
circumstances
connected with the proposed transaction, justify such
a course.”
7
During
the negotiations the land was independently valued, if rezoned for
optimal use, at R71 million. The Municipality added
conditions on
top of the purchase price. These were that the land had to be used
for the core activities of the development of
a film studio and
associated infrastructure. If it was not, or if Rinaldo sold the
land to an outsider for non-core purposes,
a “claw-back”
provision provided that the purchase price would increase, according
to a prescribed formula, up to
the stipulated market value of R71
million. To cast this in iron, the agreement required that the usage
restriction be recorded
as a restrictive condition in the title
deed. The effect was that Rinaldo was obliged, in return for a
heavily reduced purchase
price, to develop the land at its own
expense, in accordance with details set out in annexures to the
agreement, so as to fulfil
the Municipality’s and the
Province’s economic development vision.
The
Ordinance requires that property sales be advertised before a final
decision is taken.
8
The Municipality advertised the sale in December
2003, the parties signed the contract, and it lay for public
inspection. The
contract’s terms made it expressly subject to
the Municipality acquiring the SANDF property, and obtaining all
required
administrative approvals.
Two
objections were received. One was from Giant. It was signed by
Mr Karamchand Modilal Gayadin who, although
not a
member of the close corporation, represented it throughout. The
objection read:
“
Kindly
take notice that the above named close corporation hereby places on
record its objection to the sale of the aforesaid property.
The close corporation furnishes
inter alia
its reasons for such objection, namely that it is
involved in the entertainment business and has an interest in the
development
of a movie studio and other allied facilities on the
site.
Further take notice that the
close corporation’s offer to purchase the aforesaid immovable
property shall be greater than
the present offer submitted to you,
which offer I am given to understand is R15 million.
We trust you find the above in
order and invite you to contact the writer should you require any
further information.”
In
January 2004, senior municipal officials met with Mr Gayadin to
allow him to explain and expand upon this objection. Mr Gayadin
told
them he was involved in the entertainment industry and imported
videos primarily from India.
9
He said he wanted an opportunity to purchase the
site. He was then invited to disclose his proposals for its
development. But
he refused to do so, on the basis that these were
confidential. He was unable to show that he had any involvement in
or knowledge
of the film industry. Indeed, Giant’s letterhead
indicates that its area of operation, as its name suggests, is
organising
large concerts – “Mind Blowing Live
Concerts”. There is no mention of film.
Inasmuch
as Giant had based its objection on the purchase price of
R15 million, the Municipality’s officials explained
the
pricing in the context of the use restrictions and claw-back
provisions. Mr Gayadin stated simply that he would pay more.
But he
declined to indicate how much. Similarly, he did not submit any
information or proposal for the development of the property.
During
the meeting, the officials told Mr Gayadin that nothing had been
said or disclosed to them justifying any change in the

Municipality’s decision to sell the site to Rinaldo, and that
they would accordingly submit a report to the Municipality’s

Executive Committee to confirm the decision to sell the site to
Rinaldo. The officials state that Mr
Gayadin was invited to
submit proposals and chose not to do so.
Indeed,
at no stage did Giant submit any offer of any kind to the
Municipality regarding either price or development. In a later

letter, t
he Municipality advised Mr Gayadin that a report had
been submitted detailing Giant’s objections, and that he would
be advised
further in due course, though this was never done.
Having
considered Giant’s objections the Municipality’s
Council, a little over a month later,
on 26 February 2004,
approved the sale to Rinaldo. As the Ordinance
required, the transaction was then referred to the MEC for
approval.
10
Giant persisted with its objection. On 24 March
2004, its attorney wrote to the Premier of KwaZulu-Natal (Premier)
complaining
that the Municipality was “not transparent in
awarding the site to Mr Anant Singh’s company.” Giant
insisted
that it was entitled to place before the Premier a
“substantive proposal regarding the site and its planned
development”.
Giant
received no reply to this assertion
until shortly before the sale was approved. At this stage, the MEC
stated that he had not
seen the various letters sent to the Premier.
In his replying affidavit, dealing with the
Municipality’s account of the January 2004 meeting, Mr Gayadin
on behalf of
Giant said: “What I had in mind was that I would
be afforded an appropriate opportunity to revert with a counter
proposal
before a final decision was taken.” (Emphasis
removed.)
The
MEC, after considering the objection, required that various further
protective conditions be added to the sale agreement.
These the
Municipality accepted. On 22 February 2005 he approved the
transaction. In response to Giant’s request for
reasons, he
explained that he approved the transaction because it would enhance
local economic development through the creation
of a film industry
in Durban and in KwaZulu-Natal; the claw-back provisions ensured
that if the land were sold for non-core activities
the Municipality
would recover; and Rinaldo could call upon considerable expertise
and leadership in film-making both within
South Africa and
internationally, which made the development more likely to be
sustainable. The MEC explained that, after weighing
Giant’s
objections and the Municipality’s response, he considered that
the transaction’s benefits outweighed
any disadvantages.
On 3
May 2005, Giant launched these proceedings to review and set aside
the Municipality’s and the MEC’s decisions.
Giant’s
papers contain no more detail regarding price or development than it
was prepared to proffer at the meeting in
January 2004. The
High Court heard the application on 11 June 2009, more than 4 years
after it was lodged.
High Court
In the High Court, the Municipality and Rinaldo
11
contended that Giant had no standing to challenge
the validity of the sale. The High Court rejected this argument.
12
Giant claimed on a number of grounds, going to
lawfulness, procedural fairness and reasonableness, that the
decisions were invalid.
In a judgment delivered more than 15 months
after argument, the High Court upheld all Giant’s arguments.
It set aside
the Municipality’s decision to sell the property
to Rinaldo, as well as the MEC’s approval of the sale.
Supreme
Court of Appeal
The
Supreme Court of Appeal overturned the High Court judgment on the
narrow basis that Giant lacked standing to bring the review.
It
therefore did not find it necessary to comment on the substance of
Giant’s complaints. In essence, the Court found that
“only
those with an interest in the ‘interests of the borough’
have standing” to challenge decisions
under the Ordinance
since it “concerns itself with local interests”.
13
The provisions of the Ordinance
14
regulating the sale of immovable property are designed to protect
the interests of the local community only.
15
The Court reasoned that Giant claimed to act only in its own
interest. Its registered address was not in Durban, but in
Pietermaritzburg.
It therefore did not have ratepayer status in the
Municipality.
16
Giant
accepted that the land should be sold to develop a film industry. It
objected that the private sale to Rinaldo deprived
it of an
opportunity to present its own proposals. By definition, the Supreme
Court of Appeal found, once Giant accepted that
there would be no
public tender, it had no interest in who the Municipality chose to
contract with.
17
Since Giant had no interest in the interests of the borough, it did
not have the right to object to the sale or to seek to review
the
decisions in issue.
18
Parties’
contentions in this Court
Giant
submits that the Supreme Court of Appeal’s approach to
standing is inconsistent with the Constitution and the Promotion
of
Administrative Justice Act
19
(PAJA). It relies on the jurisprudence of this Court to argue that
section 38 of the Bill of Rights requires a broader approach
to
standing (even where the provision is not of direct application).
20
The transaction is not an ordinary private agreement but one with an
organ of state disposing of state-owned land, at a highly
favourable
price, and by private treaty, without a competitive process. Thus
Giant’s objection ought not to be dealt with
under the
restrictive common law approach to standing.
Giant
also contends that section 217 of the Constitution
21
applies to transactions in which an organ of state contracts for the
sale of land, and that the Ordinance should be interpreted
as part
of a legislative system giving effect to that section. Section 217
makes competitiveness a necessary component of state
tendering and
thus there is a presumption in favour of open and competitive
auctions, and the sale of assets at market-related
prices. In
stripping non-ratepayers of the right to object to sales by private
treaty, competition will be diminished.
The
Supreme Court of Appeal decision, Giant says, denies an affected
party the right to secure redress for administrative unfairness
when
it participates in the sale of land by private treaty. The Court’s
restrictive approach to standing is inconsistent
with the right to
just administrative action and the principle of legality. Giant
contends that its involvement in the objection
process constituted
an exercise of its right to political participation. This the
judgment undermines by precluding it from challenging
a sale of
municipal land on the basis that it is not a ratepayer.
Giant
says it has standing independently of the Constitution because the
Ordinance gave it the right to object
22
– a right it exercised. Had Giant not had an interest in the
first place, its objection would not have been entertained
or would
have been rejected on the basis of absence of an interest. The
decisions of the Municipality and the MEC, it says, constituted

administrative action and Giant was entitled to a lawful and
procedurally fair process and outcome. The principle of legality

means that an unlawful decision is liable to be set aside whether or
not it infringed the rights of Giant.
On
the substance of its challenge, Giant advances six grounds on which
the transaction must be set aside: (i) the sale was beyond
the
Council’s powers under the Ordinance (ultra vires), since the
land was not owned by the Municipality, nor was it freely

alienable;
23
(ii) the agreement was subject to suspensive conditions, regarding
title to and rezoning of the property, which were not satisfied
in a
reasonable time or at all;
24
(iii) there was no proper authority for approval of the sale, since
the MEC, and not the Premier, granted authorisation;
25
(iv) the Municipality breached the Ordinance because it approved the
sale before hearing objections, and failed to make the agreement

available for inspection in both English and Afrikaans;
26
(v) procedural fairness was violated in that Rinaldo was given undue
preference and no alternative proposals were considered
while, in
addition, Giant was never notified of the outcome of its objection
and no reasons were furnished for rejecting it;
and (vi) the
decision was unreasonable in the circumstances.
Rinaldo
argues that, despite the constitutional approach to standing being
generous, the indispensable requirement remains that
a litigant must
show “sufficient interest”. This is not a case of public
interest standing. It supports the finding
of the Supreme Court of
Appeal that even a generous approach to constitutional standing
“does not mean that everyone who
alleges an infringement of a
fundamental right has an unfettered right of access to court”.
27
To
bring a PAJA challenge, Rinaldo says, Giant had to establish that
the administrative action complained of adversely affected
its
rights, or that the acts had the capacity to affect its legal
rights; and that the acts had a direct, external legal effect.

Instead, Giant has failed to establish that it was an “affected
party” at all, or that it had an affected right or
prospective
right that was violated. Rinaldo disputes that the Supreme Court of
Appeal judgment limits objectors to ratepayers;
rather, all who have
a demonstrable interest in the interests of the borough may object.
The outcome would have been different
if a viable competitor from
the industry had objected on the basis that concluding the
transaction with it would be more advantageous
either to the
Municipality or to the public interest. Reading section 233(8) of
the Ordinance through the prism of section 217
of the Constitution
does not improve Giant’s claim to standing.
Rinaldo
disputes that simply by raising an objection Giant automatically
gains standing to challenge the process either as “participant”

or “competitor”. Even a complainant under section 38(a)
of the Bill of Rights must have an actual or a potential
right or
interest that is affected by the ultimate administrative decision.
Giant cannot acquire standing merely because it participated
in the
objection process, and despite the fact that its participation was
not generated by any affected interest or right (actual
or
potential). Finally, Rinaldo argues that it is illogical to reason
that an individual’s mere participation in a notice
and
comment procedure gives rise to standing under section 38(a).
As
regards the merits, Rinaldo says that all the substantive challenges
to the transaction are without merit and should fail.
Leave to appeal
For leave to appeal to this Court, there must be a constitutional
issue, and the interests of justice must favour its grant.
The ambit
of standing to challenge a public transaction plainly raises a
constitutional issue. And Giant advances arguable contentions

regarding the Supreme Court of Appeal judgment. Leave should be
granted.
Does
Giant have standing to challenge the transaction?
Giant seeks to vindicate a constitutional right. The injury it
claims to have suffered is to the right to just administrative

action conferred by section 33 of the Constitution.
28
Hence its standing is determined under the Bill of Rights. Section
38 provides:
“
Anyone
listed in this section has the right to approach a competent court,
alleging that a right in the Bill of Rights has been
infringed or
threatened, and the court may grant appropriate relief, including a
declaration of rights. The persons who may approach
a court are—
(a) anyone acting in their own
interest;
(b) anyone acting on behalf of
another person who cannot act in their own name;
(c) anyone acting as a member
of, or in the interest of, a group or class of persons;
(d) anyone acting in the public
interest; and
(e) an association acting in the
interest of its members.”
PAJA, which was enacted to realise section 33, confers a right to
challenge a decision in the exercise of a public power or the

performance of a public function that “adversely affects the
rights of any person and which has a direct, external legal

effect”.
29
PAJA provides that “any person” may institute
proceedings for the judicial review of an administrative action.
30
The wide standing provisions of section 38 were not expressly
enacted as part of PAJA. Hoexter suggests that nothing much turns
on
this because “it seems clear that the provisions of section 38
ought to be read into the statute.”
31
This is correct.
The
Supreme Court of Appeal has rightly suggested that “adversely
affects” in the definition of administrative action
was
probably intended to convey that administrative action is action
that has the capacity to affect legal rights, and that impacts

directly and immediately on individuals.
32
The effect of this is that Giant, as an own-interest litigant, had
to show that the decisions it seeks to attack had the capacity
to
affect its own legal rights or its interests.
In
seeking to assert this right, Giant has never claimed to be acting
on behalf of someone else who was incapacitated,
33
or as a member of, or in the interest of, a group or class of
persons,
34
or in the public interest,
35
or in the interest of the members of an association.
36
The sole interest it claims to assert is its own, which during
argument its counsel correctly described as commercial. It is
that
interest we must examine to see whether it affords Giant title to
challenge the transaction.
And
in determining Giant’s standing, we must assume that its
complaints about the lawfulness of the transaction are correct.
This
is because in determining a litigant’s standing, a court must,
as a matter of logic, assume that the challenge the
litigant seeks
to bring is justified.
37
As Hoexter explains:
“
The
issue of standing is divorced from the substance of the case. It is
therefore a question to be decided
in
limine
[at the outset], before the merits are considered.”
38
The
separation of the merits from the question of standing has two
implications for the own-interest litigant. First, it signals
that
the nature of the interest that confers standing on the own-interest
litigant is insulated from the merits of the challenge
he or she
seeks to bring. An own-interest litigant does not acquire standing
from the invalidity of the challenged decision or
law, but from the
effect it will have on his or her interests or potential interests.
He or she has standing to bring the challenge
even if the decision
or law is in fact valid. But the interests that confer standing to
bring the challenge, and the impact the
decision or law has on them,
must be demonstrated.
Second,
it means that an own-interest litigant may be denied standing even
though the result could be that an unlawful decision
stands. This is
not illogical. As the Supreme Court of Appeal pointed out, standing
determines solely whether
this
particular litigant is
entitled to mount the challenge: a successful challenge to a public
decision can be brought only if “the
right remedy is sought by
the right person in the right proceedings”.
39
To this observation one must add that the interests of justice under
the Constitution may require courts to be hesitant to dispose
of
cases on standing alone where broader concerns of accountability and
responsiveness may require investigation and determination
of the
merits. By corollary, there may be cases where the interests of
justice or the public interest might compel a court to
scrutinise
action even if the applicant’s standing is questionable. When
the public interest cries out for relief, an applicant
should not
fail merely for acting in his or her own interest.
Hence,
where a litigant acts solely in his or her own interest, there is no
broad or unqualified capacity to litigate against
illegalities.
Something more must be shown.
How
much more was the issue in
Ferreira
.
40
There this Court considered own-interest constitutional standing
under the interim Constitution, whose provision here was materially

similar to section 38 of the Constitution.
41
The applicants were obliged to answer questions at an inquiry under
a statute providing that their answers, even if incriminating,
could
later be used in evidence against them. They sought to challenge the
constitutional validity of the provision. But they
had not yet been
charged, nor was there an actual prosecution, or even one
threatened,
42
where their answers would be used against them. This Court split on
whether this gave them standing to challenge the provision
on
fair-trial grounds. A majority found that it did.
43
Chaskalson P held that, even where own-interest standing is at
issue, this Court should adopt a “broad approach”:
44
“
This
would be consistent with the mandate given to this Court to uphold
the Constitution and would serve to ensure that constitutional
rights
enjoy the full measure of protection to which they are entitled.”
45
The
object of the standing requirement, the Court held, was that courts
“should not be required to deal with abstract or
hypothetical
issues, and should devote its scarce resources to issues that are
properly before it”.
46
The Court held that own-interest standing does not require that a
litigant must be the person whose constitutional right has
been
infringed or threatened: “What the section requires is that
the person concerned should make the challenge in his
or her own
interest.”
47
That was plainly the case with the applicants. The core of their
complaint was that they were required to answer questions that
might
incriminate them, and which might later be used in evidence against
them.
48
This meant that the provision directly affected their interests.
49
Even though the “direct” interest lay in the potential
impact of the challenged provision on their interests –
since
no prosecution was impending or threatened – their wish to
secure a ruling on the provision was not hypothetical
or academic,
but raised a real and substantial issue. They therefore had
sufficient interest in having it resolved.
50
Similarly,
in
Eisenberg
,
51
the question was whether the Minister could issue regulations
without following a statutory consultative process involving a

public notice and comment procedure. This Court held that a law firm
practising mainly in immigration law had own-interest standing
to
challenge regulations that the Minister issued without following
that process. The Court pointed out that the law firm would
have had
a right to comment on the draft regulations, had the process been
applicable to them. The law firm therefore “had
an interest as
a member of the public in asserting the right that it claimed to
have and had standing to raise that issue in
its own interests.”
52
And
in
Kruger v President of Republic of South Africa and Others
53
an attorney was held to have personal standing to challenge
presidential proclamations that were of “direct and central

importance” to the field in which he practised.
54
The attorney had established that significant legal uncertainty
existed about the proclamations, with adverse effects on the

administration of justice. This had negatively affected his ability
to understand and engage with the legislative scheme on which
his
clients relied for compensation, making him less able to manage his
clients’ affairs.
55
This Court held that even though the Bill of Rights standing
provision was not directly applicable, since the proclamations were

challenged on rationality and rule of law grounds,
56
a generous approach to standing was nonetheless necessary.
57
This was to “facilitate the protection of the Constitution”
58
because—
“
constitutional
litigation is of particular importance in our country where we have a
large number of people who have had scant educational
opportunities
and who may not be aware of their rights”.
59
The
Court nevertheless cautioned that legal practitioners asserting
personal standing to challenge legislative acts have to show
that
bringing the challenge is in the interest of the administration of
justice (for instance, a “need for legal certainty”).
60
Relying “purely on financial self-interest” is not
enough.
61
These
cases make it plain that constitutional own-interest standing is
broader than the traditional common law standing, but that
a
litigant must nevertheless show that his or her rights or interests
are directly affected by the challenged law or conduct.
The
authorities show:
To
establish own-interest standing under the Constitution a litigant
need not show the same “sufficient, personal and direct

interest” that the common law requires,
62
but must still show that a contested law or decision directly
affects his or her rights or interests, or potential rights or

interests.
63
This
requirement must be generously and broadly interpreted to accord
with constitutional goals.
64
The
interest must, however, be real and not hypothetical or academic.
65
Even
under the requirements for common law standing, the interest need
not be capable of monetary valuation,
66
but in a challenge to legislation purely financial self-interest may
not be enough – the interests of justice must also
favour
affording standing.
67
Standing
is not a technical or strictly-defined concept.
68
And there is no magical formula for conferring it. It is a tool a
court employs to determine whether a litigant is entitled to
claim
its time,
69
and to put the opposing litigant to trouble.
Each
case depends on its own facts. There can be no general rule covering
all cases. In each case, an applicant must show that
he or she has
the necessary interest in an infringement or a threatened
infringement.
70
And here a measure of pragmatism is needed.
71
The
impact of the Constitution on own-interest standing is evident in
Ferreira
,
72
Eisenberg
73
and
Kruger
.
74
However, it is in my view necessary to emphasise that in each of
those cases the own-interest litigant showed that his or her

interests or potential interests were “directly affected”
by the action sought to be challenged.
75
It should be noted that the own-interest provision in section 38(a)
is not isolated – it stands alongside section 38(b)-(e).
76
These provisions create scope for public interest, surrogate,
representative and associational challenges to illegality. The
risk
that an unlawful decision could stand because an own-interest
litigant cannot establish standing is diminished by the fact
that
broad categories of other litigants, not acting in their own
interest, are entitled to bring a challenge.
The
own-interest litigant must therefore demonstrate that his or her
interests or potential interests are directly affected by
the
unlawfulness sought to be impugned.
The
Supreme Court of Appeal found the key to Giant’s lack of
own-interest standing in a provision of the Ordinance that
empowered
the Municipality to sell by private bargain if this was “in
the interests of the borough”.
77
The Court concluded from this that the Ordinance was concerned with
local interests only, and was designed to protect those “with

an interest ‘in the interests of the borough’”.
78
Since Giant was not a local ratepayer, and since its objections were
not aimed at the “interests of the borough”,
it had no
standing:
“
Giant
Concerts is in the same position as the hypothetical ratepayer from
Johannesburg or businessman from Cape Town. It is not
a ratepayer in
Durban or a member of the local community, if an artificial person
could be said to be a member of a community,
and it has no interest
in the ‘interests of the borough’. Furthermore, its
objection was not aimed at the ‘interests
of the borough’.
It accepted that the land should be sold by private bargain for the
purposes proposed but to it, rather
than to Rinaldo Investments. It
has no interest in
who
the municipality chooses to contract with, once it has decided to
sell immovable property by private bargain, because by definition
one
is not dealing with a public tender.”
79
As
appears shortly, I agree that Giant lacked standing, but I reach
this conclusion on grounds that are less restrictive to own-interest

standing. In my view, the Supreme Court of Appeal could have
afforded more weight to the injunction in
Ferreira
that “we
should rather adopt a broad approach” to the constitutional
provisions on standing.
80
The Ordinance does indeed focus on local interests, but in my view
determining own-interest standing under it should be done
broadly
and generously to ensure that any litigant who establishes that his
or her interests or potential interests may be directly
affected by
a transaction can challenge it.
And
here I do not agree that Giant was in the same position as a
hypothetical ratepayer from another city. At common law, of course,

status as a ratepayer in a municipality was by itself enough to
confer standing to challenge acts of the local authority.
81
But the converse was not true. A litigant did not have to be a
ratepayer to challenge a municipality’s acts, provided he
or
she had a direct interest in the issue.
82
It would follow, in line with the greater amplitude afforded to
standing in the constitutional setting, that even a non-ratepayer

who establishes a sufficient interest in the lawfulness of the
transaction has standing. Commitment to the “interests of
the
borough” is not the touchstone.
Thus,
while I endorse the overall conclusion of the Supreme Court of
Appeal, it is important to emphasise that the broad ambit
of
constitutional standing must be preserved even for own-interest
challenges.
Did
Giant, albeit a non-ratepayer with no interest in the interests of
the borough, establish that its own interests were directly
affected
by the transaction? That depends on the particular way in which
Giant described and asserted its interest. As explained
earlier,
83
Giant, when confronted with an opportunity,
refused
to set out any development plans for the site, claiming they were
“confidential”. It could show no film industry
expertise
at all. Though claiming to be willing to pay more than the cash
component of the purchase consideration, Giant declined
to indicate
how much. And the cash part was heavily freighted with the
developmental obligations Rinaldo undertook in the contract,
and the
international film-making expertise and clout it would bring. Giant
never indicated that it could come close to matching
these. In fact,
it submitted no information or proposal for the development of the
property at any stage, nor did it make any
offer of any kind to the
Municipality.
Giant
complains that it was never given a proper opportunity to present
its own proposals to the Municipality. In fact, the municipal

officials who met with Giant did invite Mr Gayadin to submit
proposals.
84
He never did. But Giant’s complaint seeks to require the
Municipality to take active steps, beyond the invitation already

extended, to give it a chance to submit a proposal. The Municipality
was not obliged to do that. Giant was free to signify the

seriousness of its interest in the development by going ahead and
submitting a proposal to the Municipality; but it never did
so.
While
constitutional own-interest standing is broad, it is not limitless.
Ferreira
draws the line at hypothetical and academic
interests.
85
Giant objected to the Municipality and to the MEC about the
transaction on the hypothesis that it wanted an opportunity to lodge

its own offer. But it never substantiated the hypothesis in the form
of a plan, price or proposal. And nothing stopped it from

formulating and submitting an offer, even a tentative or outline
offer. Yet it never did.
A hypothetical interest is one that is expressly claimed, but is
neither real nor true.
86
And an academic interest is one that is not related to a real or
practical situation and is therefore irrelevant.
87
It seems plain that a commercial interest in the subject-matter of
the transaction will be sufficient to establish own-interest

standing to challenge it. But Giant never demonstrated that it had
any serious commercial interest in the site. In saying that
it
wanted to develop the site, but never saying how, the interest Giant
claimed remained hypothetical. In saying that it wanted
to offer
more, but never saying how much, its offer remained academic. An
unsubstantiated expression of a future wish or intention
to submit a
proposal, or to purchase a site, is not sufficient. Giant did not
show that it had interests that were capable of
being directly
affected. That is why this case is different from
Ferreira
,
88
Eisenberg
89
and
Kruger
.
90
Even
in all the hundreds of pages of contesting documents and
attestations lodged over a period of many years in these
proceedings,
Giant never expanded on its plans or its purported
interest or proposed offer. It gave no more detail than it did to
the Municipality’s
officials who met Mr Gayadin in January
2004. There was no reason why it could not. It was free at any stage
when the transaction
was published in December 2003 to propound
more detail of what it wanted to do with the site, and the
commercial and monetary
foundation on which it proposed to do it.
This
is not to say that to acquire standing Giant had to make a binding
offer, or one capable of immediate acceptance or implementation.
For
it to demonstrate that the proposed transaction would directly
affect its interests, it had only to give a realistic indication,
in
some form,
first
that it was serious in its intentions, by
indicating the price it was willing to pay, and
second
that
it had the capacity to give practical substance to its intentions.
This it never did. Merely postulating a claim to interest
is not
enough. The interest must be described and have some tangibility.
Giant does not meet even this minimal own-interest threshold.
Giant’s
complaint was that the Municipality, the Premier and the MEC did not
give it an opportunity to make an alternative
proposal to that
embodied in the transaction with Rinaldo. But nothing prevented it
from giving more flesh and bones to its interest
when it approached
the High Court. It had to demonstrate its standing for the purpose
of the review, which was different from
what was required under the
Ordinance to lodge an objection. All that was required of Giant when
it lodged its legal challenge
was to show that its complaint –
that it should have been given an opportunity to present its own
proposal – was
well-grounded because it had the capacity to
make a realistic counter-proposal. It did not have to show that its
proposal would
have carried the day. Yet nothing in the papers
suggests that Giant had that capacity.
The
inference that Giant was merely toying with process, or seeking to
thwart a propitious public development because it had been
made
available to someone else, is therefore one the Court is entitled to
draw. The consequence is that Giant lacks standing,
since its
interest remains incipient and has never become direct or
substantial.
Giant’s
mere participation in the notice and comment process by lodging an
objection did not confer standing on it to challenge
the
transaction. The very point of that process is to identify
objections, to afford them expression, and then to evaluate and

consider them.
91
It is not logical to assert that an own-interest standing
qualification arises from participation in a process if the
objection
remains hypothetical and academic.
Section
217 of the Constitution, on which Giant relied, does not give
stronger warrant to its claim to standing.
92
This is because Giant never gave substance to its complaint that the
process should have involved competitive tendering by even
minimally
showing in the review proceedings that it had the capacity to make a
competitive alternative proposal. Ultimately this
is why it should
be denied standing.
93
Merits
This
conclusion makes it unnecessary to address the merits of Giant’s
challenges to the transaction, since it has established
no legal
interest in their adjudication. When a party has no standing, it is
not necessary to consider the merits, unless there
is at least a
strong indication of fraud or other gross irregularity in the
conduct of a public body. The full record of the
dispute was before
us, and we heard full argument on all of Giant’s complaints.
On the papers before us, we are unable
to find that there is fraud
or gross irregularity. I will therefore say nothing about the
merits.
Order
The
following order is made:
1. Leave to appeal is granted.
2. The appeal is dismissed with costs, including
the costs of two counsel.
For
the Applicant: Advocate GJ Marcus SC and Advocate N Ferreira
instructed by Vathers Attorneys.
For
the First Respondent: Advocate PJ Olsen SC and Advocate AA Gabriel SC
instructed by J H Nicolson Stiller & Geshen.
1
Rinaldo
Investments (Pty) Ltd v Giant Concerts CC and Others
[2012] 3
All SA 57
(SCA) (Plasket AJA, with Mthiyane DP, Cachalia, Cloete and
Malan JJA concurring) (Supreme Court of Appeal judgment).
2
Giant
Concerts CC v Minister of Local Government, Housing and Traditional
Affairs, KwaZulu-Natal and Others
2011 (4) SA 164
(KZP) (Mnguni
J) (High Court judgment).
3
Supreme
Court of Appeal judgment above n 1 at paras 2-10.
4
At
the material times, the contested actions were those of the acting
MEC, Mr Michael Mabuyakhulu.
5
The
Local Government: Municipal Structures Act 117 of 1998
requires all
municipalities to address priority needs through an integrated
development plan. See in this regard
sections 30(5)
,
44
(2)(c),
56
(2)(c),
83
(3)(a) and
84
(1)(a).
6
">
6
25
of 1974.
7
Section
233(8)
of the Ordinance.
8
Section
234(1)
of the Ordinance. In the case of private bargains,
section
234(2)(c)
requires, in addition, that the name of the purchaser
generally be stated.
9
The
account of the meeting is from the affidavits of the Municipality’s
head of real estate, Mr Keith Mattias. Since Giant
did not ask for
the municipal officials at the meeting to be cross-examined, counsel
for Giant, which asked for final relief
on affidavits, rightly
accepted during oral argument that the usual rule required the
matter to be decided on the officials’
version.
10
Section
235(1)
of the Ordinance.
11
In
the High Court, the MEC no longer persisted with the point on
Giant’s standing: see the High Court judgment above n 2
at
para 15.
12
They
also contended
that because Mr Gayadin had been
convicted of offences involving dishonesty,
section 47
of the
Close
Corporations Act 69 of 1984
disqualified him from taking part in the
management of Giant. This point, too, was rejected, and was not
persisted in before
us.
13
Supreme
Court of Appeal judgment above n 1 at para 31.
14
Sections
233
,
234
and
235
of the Ordinance.
15
Supreme
Court of Appeal judgment above n 1 at paras 25-6.
16
Id
at para 13.
17
Id
at para 30.
18
Id
at paras 30 and 32.
19
3
of 2000.
20
Section
38
is quoted in full at below.
21
Section
217
provides:
“
(1) When an organ of state in
the national, provincial or local sphere of government, or any other
institution identified in national
legislation, contracts for goods
or services, it must do so in accordance with a system which is
fair, equitable, transparent,
competitive and cost-effective.
(2) Subsection (1) does not prevent the organs of state
or institutions referred to in that subsection from implementing a
procurement
policy providing for—
(a) categories of preference in the allocation of
contracts; and
(b) the protection or advancement of persons, or
categories of persons, disadvantaged by unfair discrimination.
(3) National legislation must prescribe a framework
within which the policy referred to in subsection (2) must be
implemented.”
22
Section
234(1)
of the Ordinance requires “consideration of the
objections, if any, lodged in accordance with [an] advertisement”.
23
Section
233(1)
of the Ordinance.
24
Section
233(12)
of the Ordinance.
25
Section
235(1)
of the Ordinance.
26
Section
234
of the Ordinance.
27
Supreme
Court of Appeal judgment above n 1 at para 14.
28
Section
33 of the Constitution provides:
“
(1) Everyone has the right to
administrative action that is lawful, reasonable and procedurally
fair.
(2) Everyone whose rights have been adversely affected
by administrative action has the right to be given written reasons.
(3) National legislation must be enacted to give effect
to these rights, and must—
(a) provide for the review of administrative action by
a court or, where appropriate, an independent and impartial
tribunal;
(b) impose a duty on the state to give effect to the
rights in subsections (1) and (2); and
(c) promote an efficient administration.”
29
Definition
of “administrative action” in section 1 of PAJA.
In
Greys Marine Hout Bay (Pty) Ltd and Others v Minister of
Public Works and Others
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA) (
Greys Marine
)
at para 21, Nugent JA consolidated and abbreviated this definition
as follows:
“
Administrative action means
any decision of an administrative nature made . . . under an
empowering provision [and] taken . .
. by an organ of State, when
exercising a power in terms of the Constitution or a provincial
constitution, or exercising a public
power or performing a public
function in terms of any legislation, or [taken by] a natural or
juristic person, other than an
organ of State, when exercising a
public power or performing a public function in terms of an
empowering provision, which adversely
affects the rights of any
person and which has a direct, external legal effect”.
30
Section
6(1) of PAJA.
31
See
Hoexter
Administrative Law in South Africa
2 ed (Juta &
Co, Cape Town 2012) at 494.
32
Greys
Marine
above n 29 at para 23.
33
Section
38(b) of the Constitution.
34
Section
38(c) of the Constitution.
35
Section
38(d) of the Constitution.
36
Section
38(e) of the Constitution.
37
Jacobs
en ‘n Ander v Waks en Andere
[1991] ZASCA 152
;
1992 (1) SA 521
(A) at 536A
(
Jacobs
).
38
Hoexter
above n 31 at 488.
39
Supreme
Court of Appeal judgment above n 1 at para 14, quoting Wade and
Forsyth
Administrative Law
9 ed (Oxford University Press, New
York 2004) at 281, as approved in
Oudekraal Estates (Pty) Ltd v
City of Cape Town and Others
2004 (6) SA 222
(SCA) at para 28.
40
Ferreira
v Levin NO and Others; Vryenhoek and Others v Powell NO and Others
[1995] ZACC 13
;
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC).
41
Section
7(4) of the interim Constitution provided:
“
(a) When an infringement of
or threat to any right entrenched in this Chapter is alleged, any
person referred to in paragraph
(b) shall be entitled to apply to a
competent court of law for appropriate relief, which may include a
declaration of rights.
(b) The relief referred to in paragraph (a) may be
sought by—
(i) a person acting in his or her own interest;
(ii) an association acting in the interest of its
members;
(iii) a person acting on behalf of another person who
is not in a position to seek such relief in his or her own name;
(iv) a person acting as a member of or in the interest
of a group or class of persons; or
(v) a person acting in the public interest.”
42
See
the judgment of O’Regan J in
Ferreira
above n 40 at
paras 224 and 228.
43
Seven
members of the Court (Chaskalson P, with whom Mahomed DP, Didcott J,
Langa J, Madala J and Trengove AJ concurred, and with
whom Mokgoro J
concurred on this point) found that the applicants had own-interest
standing. Ackermann J, Kriegler J, O’Regan
J and Sachs J held
that the applicants had not established own-interest standing.
44
Ferreira
above n 40 at para 165.
45
Id.
46
Id.
47
Id
at para 168.
48
Id
at para 160.
49
Id
at paras 162 and 166-8.
50
Id
at para 160.
51
Minister
of Home Affairs v Eisenberg & Associates: In re Eisenberg &
Associates v Minister of Home Affairs and Others
[2003] ZACC 10
;
2003 (5) SA 281
(CC);
2003 (8) BCLR 838
(CC) (
Eisenberg
).
52
Id
at para 28 (Chaskalson CJ, on behalf of a unanimous Court).
53
[2008]
ZACC 17
;
2009 (1) SA 417
(CC);
2009 (3) BCLR 268
(CC) (Skweyiya J,
with whom Langa CJ, O’Regan ADCJ, Madala J, Mokgoro J, Ngcobo
J, Nkabinde J, Van der Westhuizen J and
Kroon AJ concurred, and with
whom Yacoob J concurred on standing at para 119; Jafta AJ accepted
that the applicant had standing
at para 90).
54
Id
at para 25.
55
Id.
56
Id
at paras 14, 49 and 64.
57
Id
at para 23.
58
Id.
59
Id.
60
Id
at para 26.
61
Id.
62
Hoexter
above n 31 at 488.
63
Ferreira
above n 40 at paras 162 and 166-8.
64
Id
at para 165.
65
Id
at paras 160 and 164-5.
Eisenberg
above n 51 sets out the
reasoning of the High Court at para 25, whose finding is endorsed at
para 28.
66
Jacobs
above n 37 at 535A-B.
67
Kruger
above n 53 at para 26.
68
Jacobs
above n 37 at 534A-B.
69
Compare
Ferreira
above n 40 at para 165 (“it is important that
this Court should not be required to deal with abstract or
hypothetical issues,
and should devote its scarce resources to
issues that are properly before it”).
70
Ferreira
above n 40 at para 231, per O’Regan J. See also
Jacobs
above n 37 at 534D.
71
Jacobs
above n 37 at 541E.
72
Above
n 40.
73
Above
n 51.
74
Above
n 53.
75
Minister
of Public Works and Others v Kyalami Ridge Environmental Association
and Another (Mukhwevho Intervening)
[2001] ZACC 19
;
2001 (3) SA
1151
(CC);
2001 (7) BCLR 652
(CC) at para 54, which the parties in
the present matter debated in argument, does not address standing at
all, since standing
was not in issue (because the residents’
association clearly had associational, surrogate or representative
standing).
Chaskalson P noted that it was “not necessary”
for determining legality to consider whether the decision in issue
“affects the rights or interests of the Kyalami residents”.
He said “[i]f it were an unlawful decision it would
be invalid
and liable to be set aside whether it infringed their rights or
not.” The passage merely affirms that the impact
of an
impugned decision on those who have standing to challenge it is not
part of the inquiry into its legality.
76
Section
38 is quoted in full at above.
77
Section
233(8) of the Ordinance.
78
Supreme
Court of Appeal judgment above n 1 at paras 29 and 31.
79
Id
at para 30.
80
Ferreira
above n 40 at para 165.
81
Jacobs
above n 37 at 536D-E. See on this point the illuminating
discussion of
Dalrymple v Colonial Treasurer
1910 TS 372
in
Plasket
The Fundamental Right to Just Administrative Action:
Judicial Review of Administrative Action in the Democratic South
Africa
(unpublished DPhil thesis, Rhodes University 2002) at
204-6, and of constitutional standing generally at 208-43.
82
See
Jacobs
above n 37 at 540I-541D (a non-ratepayer from an
adjoining township who works in the town and regularly visits its
parks has standing
to challenge their segregation along racial
lines).
83
See
[10] and [11] above.
84
See
[11] above.
85
Ferreira
above n 40 at paras 164-5.
86
Concise
Oxford English Dictionary
11 ed (Oxford University Press, Oxford
2009) defines “hypothetical” as follows:
“
1. based on or serving as a
hypothesis . . . supposed but not necessarily real or true.”
87
Concise
Oxford English Dictionary
above n 86 defines “academic”
as follows:
“
3. not related to a real or
practical situation and therefore irrelevant.”
88
Above
n 40.
89
Above
n 51.
90
Above
n 53.
91
In
Kruger
above n 53, the applicant’s right to participate
in a notice and comment process was held to give it own-interest
standing
to challenge a proclamation
on the ground that the
proclamation was issued without complying with that very process
.
92
Section
217 is quoted in full above n 21.
93
Hoexter
above n 31 at 491, would prefer that “judges [should] overtly
state that certain matters [are] not appropriate for
adjudication
and [should] refuse to exercise their jurisdiction on that basis.”